TBE a discount of $5 per guest in exchange for allowing the caterer to advertise. Required Suppose 150 persons attend the next event. What is TBE’s total net cost and the cost per attendee? Suppose instead that 200 persons attend. What is TBE’s total net cost and the cost per attendee. 3. How should TBE charge customers for its services? Explain briefly
The Big Event (TBE) recently started a business organizing food and music at weddings and other large events. In order to better understand the profitability of the business, the owner has asked you for an analysis of costs—what costs are fixed, what costs are variable,
Music costs : $10,000 per event
Catering costs:
Food : $65 per guest
Setup/cleanup : $15 per guest
Fixed fee : $4,000 per event
TBE has allowed the caterer, who is also new in business, to place business cards on each table as a form of advertising. This has proved quite effective, and the caterer gives TBE a discount of $5 per guest in exchange for allowing the caterer to advertise.
Required
- Suppose 150 persons attend the next event. What is TBE’s total net cost and the cost per attendee?
- Suppose instead that 200 persons attend. What is TBE’s total net cost and the cost per attendee.
3. How should TBE charge customers for its services? Explain briefly.
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